Strategic Partnerships with the Competition

Does having competition make you uncomfortable? Perhaps you should consider making a strategic alliance instead.

Competition can be a scary thing, but it can also be useful, if handled correctly. Few industries or markets are only large enough for a single player, which means that there is little reason for anyone to be afraid of their competitors. Instead, if companies welcome their competition, they will soon discover that they can benefit one another.

For example, two web development companies might initially think that they are in direct competition. However, the reality is that both companies get much of their business via referrals, for which there is no competition. Having a partnership with another company means that each company can quietly outsource their extra work when they’re busy, maintaining a positive outward appearance to their clients.

This can benefit both sides, since idle workers are expensive, so accepting the work, even at a reduced rate, benefits both businesses. Likewise, the ability to get additional workers when needed on an ad hoc basic minimizes the expense of keeping a large staff.

There are other ways as well in which companies can not compete, for example, targeting slightly different markets, or offering variations on the same service. In either case, there can even be the ability to share clients, allowing each company to focus on what makes them different from their competitors, instead of getting hung up on what makes them all the same.

  • Jeremy

    Michael Porter talks a lot about how to strategically position around competition.

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    Your article is not that long but it is completely delivered .very absorbing for the readers.